TABAO, JOANNA J.
BSA4
INTEFAR
2. Using the average method, compute the cost of completed and transferred to Tabulation
Operation.
a.1,729,520
b.2,077,760
c.1,730,250
d.1,926,000
Multiple Choice
Question 1 and 2
Unilab Pharmaceutical Company manufactures a tablet for allergy suffers. All ingredients
are added at the beginning of the Blending Operation. Conversion costs flow uniformly
throughout the process. Tabulating and coating are operations downstream from Blending.
Information on the blending Operation for October are as follows:
Work in Process – Blending Operations
Oct 1, Balance (100,00 units,
Completed and Transferred
40% complete for conversion cost)
151,760 to Tabulating:
Direct Materials added (1,000,000 units)
1,310,000
Units - ?
Direct Labor Cost
?
Costs - ?
Factory Overhead (applied at 180% of
direct labor cost
396,000
Oct 31, balance (200,000 units, 70%
complete for conversion cost
?
The October 1 balance consists of the following cost elements:
Direct Materials:
P128,000
Direct Labor
8,800
Factory Overhead
14,960
Total Cost
P151,769
1. Using the FIFO method, compute the cost completed and transferred to Tabulation
Operation.
a.1,729,520
b.2,077,760
c.1,730,250
d.1,926,000
3. The Biondle Dye Company manufactures hair rinses and colourings. Direct materials are
introduced into production at the 50% stage of completion in Department A. Direct Labor
and Factory Overhead are incurred evenly throughout the process. Because of the timing of
certain chemical processes, units are often at different stages of completion.
Management uses the FIFO costing method in an effort to analyze cost.
Beginning units in process in Department A for May were at the following stages of
completion.
40% of the units were 10% complete
15% of the units were 40% complete
20% of the units were 50% complete
25% of the units were 70% complete
Beginning Units in process amounted to 26,000 units, with a total costs of P37,700.
During May, 68,000 units were started in process. The following costs were incurred: direct
materials P47,092; direct labor P34,658; and factory overhead P51,987.
Ending units in process for May amounted to 6,000 units. They were at the following stages
of completion:
35% of the units were 25% complete.
50% of the units were 45% complete.
10% of the units were 75% complete.
5% of the units were 95% complete.
There were no spoiled units during the month.
Determine the cost of work in process inventory ending.
a.4,565.50
b.3,825.25
c.4,250.75
d.3,354.75
4. C Corporation is a manufacturer that uses average costing to account for costs of
production. C manufactures a product that is produced in three separate departments:
Molding, Assembling, and Finishing. The following information was obtained for the
assembling department for June:
Work in process, June 1 – 2,000 units, composed of:
Amount
P32,000
5. Magnolia Chicken Farms raises chicks to the egg-laying stage and then moves the hens to
the laying sheds. Information about the Chick Raising Operation for March is:
a. Beginning inventory of chicks is 12,000 100% complete for chicks and 20% for
raising costs
b. Beginning inventory costs are P129,600 for chicks and P11,530 for raising costs
c. Chicks added during March totaled 20,000
d. Costs incurred during the month are P200,000 for chicks and P121,800 for raising
costs
e. Ending inventory at March 31 consisted of 2,000 chicks, 100% complete for chicks
and 70% for raising costs
Determine the cost of hens transferred to laying sheds during March.
a.25,000
b.437,050
c.26,550
d.436,300
Degrees of Completion
100%
Transferred in from the molding department
Cost added by the assembling department
Direct Materials
20,000
100%
Direct Labor
7,200
60%
Factory Overhead
5,500
50%
The following activity occurred during June.
a.10,000 units were transferred in from Molding Department at a cost of P160,000
b.P150,000 cost were added by the Assembling Department: direct materials,
P96,000; and factory overhead P18,000
c.8,000 units were completed and transferred to the Finishing Department
At June 30, 4,000 units were still in work in process, with the following degrees of
completion: direct material 90%; direct labor 70%; and factory overhead 35%.
Determine the cost transferred out during the month of June.
a.260,000
b.114,700
c.113,500
d.261,000
6. Alberta Instrument Company uses a process costing system. A unit of product passes
through three departments – molding, assembly, and finishing – before it is completed.
The following activity took place in the Finishing Department during May.
Work in process inventory, May 1
1,400 units
Units transferred in from the Assembly Department
14,000 units
Units transferred out to finished goods inventory
11,900 units
Raw material is added at the beginning of processing in the Finishing Department. The work
in process inventory was 70% complete as to conversion on May 1 and 40% complete as to
conversion on May 31. Alberta instrument company uses the weighted-average method of
process costing. The equivalent units and current period costs per equivalent unit of
production for each cost factor are as follows for the finishing department.
Transferred in Cost
Raw Materials
Conversion Cost
Equivalent
Units
15,400
15,400
13,300
Current Period Cost per
Equivalent Unit
P 5.00
1.00
3.00
Calculate the cost of units transferred to finished goods inventory during May and the cost
of Finishing Department’s work in process inventory on May 31.
Finished Goods
a. P107,100
b. P107,100
WIP Inventory
P25,200
6,300
Finished Goods
c. P126,000
d. P126,000
WIP Inventory
P6,300
P25,200
7. Department MK had 5,000 units in process on April 1 which were 60% complete for
conversion cost. Materials are added at the beginning of the departmental processes, and
conversion costs are added uniformly throughout the process. On April 30, the in-process
inventory consisted of 8,00 units that had 25% of the workout completed. There were
83,000 equivalent units of output for the period with respect to materials. The company is
using the FIFO method. Calculate the equivalent units for the period with respect to
conversion cost.
a. 79,000
b. 80,000
c. 81,000
d. 77,000
Questions 8 and 9 are based on the following:
Hubert Products Company produces Dalandan fruit drink. The units and equivalent units (in
liters), as well as unit costs, for the initial Mix Department are as following:
Materials
Conversion
Equivalent units in beginning work in process
6,000
1,200
Units started and completed
40,000
40,000
Equivalent units in ending work in process
3,000
1,800
Unit Costs
P6.50
P10.50
8. Assuming the company uses the FIFO method. If the beginning work in process inventory
was valued at P126,000, what would be the cost of goods completed?
a. 770,000
b. 896,000
c. 644,000
d.857,600
9. Assuming the company uses the weighted average method. If the beginning work in
process inventory was valued at P126,000, what would be the cost of ending work in
process inventory?
a. P19,500
b. P18,900
c. P38,400
c. P51,600
10. Old motors is engaged in the production of a standard type of electric motor.
Manufacturing costs for April totaled P660,000. At the beginning of April, inventories
appeared as follows:
Motors in production, estimated 80% complete (250,000 units)
Motors on hand and in finished goods (1,200 units)
P320,000
P192,000
During the month, 5,500 completed units were placed in finished stock. At the end of April,
inventories were:
Motors in production, estimated 50% complete
Motors on hand, completed and finished goods
12. Emerald Inc. produced 280,000 units of products and 10,000 incomplete units (50%
complete). Direct materials which are added at the beginning of the process, cost P435,000
and conversion costs applied uniformly were P142,500. There were no beginning
inventories. The total cost absorbed by the 280,000 complete units must be:
a. P567,368
b. P577,500
c. P420,000
d. P560,000
1,000 units
1,400 units
The company uses FIFO costing for production and goods sold. In costing finished goods, the
unit cost for units completed from beginning work in process inventory is kept separate
from the unit cost of motors started and completed during the month. Compute the cost of
goods sold.
a. P861,000
b. P858,500
c. P669,000
d. 776,000
13. Karen Company had 3,000 units in work in process at April 1, 2011, which were 60%
complete as to conversion cost. During April, 10,000 units were completed. At April 30,
4,000 units remained in work in process, which were 40% complete as to conversion cost.
Direct materials are added at the beginning of the process. How many units were started
during April?
a. 9,000
b. 9,800
c. 10,000
d. 11,0000
11. The materials equivalent production units for June is 27,500. Material costs beginning
P55,000. Materials added this month is P220,000. Cost of units transferred to next
department is 82,500. How much is the material unit cost in June?
a. P3
b. P8
c. P10
d. P2
Questions 14 and 15 are based on the following:
Jethro Company manufactures top-of-the-line ice skates in a five-production-department
process. Department 3 had no beginning work in process inventory and transferred in
18,000 units from Department 2, each with an equivalent unit cost of P12.50. Within
Department 3, unit costs for direct materials, direct labor, and factory overhead (applied)
were P8.00, P9.75, and P4.00 respectively. Direct materials in Department 3 are added at
the beginning. Department 3 has 4,800 units in ending work in process inventory which are
65% complete as to conversion costs.
14. If 620 spoiled units were removed from Department 3 at Jethro’s inspection point
where conversion costs were 45% complete, what was the total spoilage cost, assuming
spoilage is handled as a separate element of cost?
a. P8,796.25
b.P11,325,25
c. P13,818.25
d. P16,546.25
15. At Jethro’s Department 3 inspection point, which is located halfway through
Department 3’s conversion process, 1,200 spoiled units were removed from production.
Normal spoilage was 800 units. If total spoilage cost was P32,850 how much of that amount
should be allocated to ending inventory?
a. P0
b. P5,821
c. P7,320
d. 8,760
Production Data
Beginning inventory (100% complete as to transferred-in; 100%
complete as to assembly material; 80% complete as
to conversion)
Transferred in during the year (100% complete as to
transferred in)
Transferred to Packaging
Ending Inventory (100% complete as to transferred-in; 50%
complete as to assembly material; 20% complete
as to conversion)
Cost Data
Transferred- In
Beginning Inventory P82,200
Current Period
1,237,800
Direct Materials
P6,600
96,840
3,000 units
45,000 units
40,000 units
4,000 units
Conversion Cost
P11,930
236,590
Damaged bicycles are identified on inspection when the assembly process is 70% complete;
all assembly material has been added at this point of the process. The normal rejection rate
for damaged bicycles is 5% of the bicycles reaching the inspection point. Any damage
bicycles above the 5% quota are considered to be abnormal. All damaged bikes are
removed from the production process and destroyed.
16. Compute the amount of the total production cost of P1,672,020 that will be associated
with normal damaged units.
a. P69,167
b. P65,793
c. P59,500
d. P74,228
Question 16 and 17 are based on the following:
APCO Company manufactures various lines of bicycles. Because of the high volume of each
type of product, the company employs a process cost system using the weighted average
method to determine unit costs. Bicycle parts are manufactured in the Molding Department
and transferred to the Assembly Department where they are partially assembled. After
assembly, the bicycle is sent to the Packing Department.
Cost per unit data for the 20-inch dirt bike has been completed through the Molding
Department. Annual cost and production figures for the Assembly Department are
presented below.
17. Compute the amount of the total production cost of P1,672,020 that will be associated
with abnormal damaged units.
a. P65,793
b. P69,167
c. P59,500
d. P60,732
18. The Jake Department is the first of a two-stage production process. Spoilage is identified
when the units have completed the Jake process. Costs of spoiled units are assigned to units
completed and transferred to the second department in the period spoilage is identified.
The following information concerns Jake’s conversion costs in May 2013:
Units
Conversion Cost
Beginning work in process (50% complete)
2,000
P10,000
Units started during May
8,000
75,500
Spoilage – normal
500
Units completed and transferred
7,000
Ending work in process (80% complete)
2,500
Using the Average method, what was Jake’s cost transferred to the second department?
a. P59,850
b. P64,125
c. P67,500
d. P71,250
19. A company produces plastic drinking cups and uses a process cost system. Cups go
through three departments – mixing, molding, and packaging. During the month of June,
the following information is known about the Mixing Department:
Work in process at June 1
10,000 units
An average ¾ complete
Units complete during June
140,000
Work in process at June 30
20,000
An average ¼ complete
Materials are added at two points in the process: Material A is added at the beginning of
the process and Material B at the midpoint of the mixing process. Conversion costs are
incurred uniformly throughout the mixing process. Under the FIFO costing flow, the
equivalent units for Material A, Material B, and Conversion costs respectively for the month
of June (assuming no spoilage) would be
a. 150,000; 130,000; and 137,500
c. 160,000; 130,000; and 135,000
b. 150,000; 140,000; and 135,000
d. 160,000; 140,000; and 137,500
20. Assume that process conversion costs are uniform but a number of materials are added
at different points in process. Material 1 is added at the beginning of the process. The
transferred-in costs are added at the 20% point in the process. Material 2 is added
uniformly from the 50% to 70% points in the process. Material 3 is added at the 75% point
in the process, and Material 4 is added uniformly at the 90% to the 100 points in the
process.
The beginning work in process was 10,000 units 60% complete, 60,000 units were added,
and an ending work in process was 20,000 units 95% complete. What was the Material 2
equivalent units for the month?
FIFO
Weighted Average
FIFO
Weighted Average
a.
50,000
60,000
c.
65,000
70,000
b.
60,000
70,000
d.
63,000
67,000